The
Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders continued to trend lower with average spreads down 5 basis points (0.05 percent) between August 13 and September 3. During the period, 10-year Treasury bond yields increased 9 basis points, with average all-in cost equal to 4.96 percent.
Asking Spreads over U.S. Treasury Bonds in Basis Points
(10-year Commercial and Multifamily Mortgage Loans with 50% to 59% Loan-to-Value ratios) |
|
12/31 |
7/16 |
7/23 |
8/6 |
8/13 |
9/3 |
Office |
342 |
221 |
237 |
241 |
244 |
241 |
Retail |
326 |
214 |
225 |
229 |
234 |
229 |
Multifamily |
318 |
198 |
204 |
209 |
215 |
209 |
Industrial |
333 |
214 |
223 |
225 |
231 |
225 |
|
|
|
|
|
|
|
Average Asking Spread |
330 |
211 |
222 |
226 |
231 |
226 |
|
|
|
|
|
|
|
10-Year Treasury |
3.83% |
2.99% |
2.91% |
2.67% |
2.61% |
2.70% |
Source: Commercial Mortgage Alert; Trepp. |
Spreads in the August 31 Cushman & Wakefield Sonnenblick-Goldman fixed and floating mortgage rate survey (below) came in slightly between August 12 and August 31, indicating that well underwritten commercial real estate loans remain sought after by financial institutions with all-in cost remaining below 5.0 percent.
Property Type |
Mid-Point of Fixed Rate Commercial Mortgage
Spreads For 5 Year Commercial Real Estate Mortgages |
|
1/6/10 |
6/23/10 |
7/28/10 |
8/12/10 |
8/31/10 |
Multifamily - Non-Agency |
+360 |
+325 |
+310 |
+300 |
+300 |
Multifamily – Agency |
+220 |
+240 |
+240 |
+240 |
+240 |
Regional Mall |
+450 |
+360 |
+330 |
+300 |
+290 |
Strip/Power Center |
+460 |
+360 |
+350 |
+325 |
+315 |
Multi-Tenant Industrial |
+435 |
+330 |
+320 |
+300 |
+290 |
CBD Office |
+435 |
+340 |
+330 |
+310 |
+320 |
Suburban Office |
+465 |
+360 |
+340 |
+325 |
+325 |
Full-Service Hotel |
+500 |
+440 |
+430 |
+400 |
+400 |
Limited-Service Hotel |
+500 |
+460 |
+450 |
+450 |
+450 |
5-Year Treasury |
2.60% |
2.06% |
1.71% |
1.58% |
1.41% |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Property Type |
Mid-Point of Fixed Rate Commercial Mortgage
Spreads For 10 Year Commercial Real Estate Mortgages |
|
1/6/10 |
6/23/10 |
7/28/10 |
8/12/10 |
8/31/10 |
Multifamily - Non-Agency |
+300 |
+190 |
+190 |
+180 |
+180 |
Multifamily – Agency |
+220 |
+190 |
+190 |
+190 |
+190 |
Regional Mall |
+350 |
+230 |
+220 |
+200 |
+200 |
Strip/Power Center |
+350 |
+240 |
+230 |
+220 |
+210 |
Multi-Tenant Industrial |
+420 |
+240 |
+235 |
+230 |
+205 |
CBD Office |
+330 |
+240 |
+235 |
+210 |
+225 |
Suburban Office |
+355 |
+250 |
+240 |
+225 |
+225 |
Full-Service Hotel |
+550 |
+350 |
+350 |
+350 |
+350 |
Limited-Service Hotel |
+575 |
+390 |
+380 |
380 |
+380 |
10-Year Treasury |
3.85% |
3.12% |
2.97% |
2.71% |
2.61% |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Property Type |
Mid-Point of Floating-Rate Commercial Mortgage
Spreads For 3 - 5 Commercial Real Estate Year Mortgages |
|
1/6/10 |
6/23/10 |
7/28/10 |
8/12/10 |
8/31/10 |
Multifamily – Non-Agency |
+300 – 400 |
+275 – 300 |
+275-300 |
+275-300 |
+275-300 |
Multifamily- Agency |
NA |
NA |
NA |
NA |
NA |
Regional Mall |
+475 – 600 |
+300 – 350 |
+300-350 |
+300-350 |
+275-350 |
Strip/Power Center |
+450 – 650 |
+300 – 350 |
+300-350 |
+300-350 |
+275-350 |
Multi-Tenant Industrial |
+400 – 500 |
+275 – 350 |
+275-350 |
+275-350 |
+250-350 |
CBD Office |
+425 |
+275 – 350 |
+275-350 |
+275-350 |
+225-300 |
Suburban Office |
+425 |
+300 – 375 |
+300-350 |
+300-350 |
+250-350 |
Full-Service Hotel |
+600 |
+400 – 550 |
+400-550 |
+400-550 |
+375-550 |
Limited-Service Hotel |
+750 |
+450 – 600 |
+450-600 |
+450-600 |
+450-600 |
1-Month LIBOR |
0.23% |
0.35% |
0.32% |
0.40% |
0.26% |
3-Month LIBOR |
0.25% |
0.54% |
0.48% |
0.62% |
0.31% |
* A dash (-) indicates a range. |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Year-to-Date Public Equity Capital Markets DJIA
(1): +0.33%
S & P 500
(2):-0.50%
NASDAQ
(3): -1.18%
MSCI U.S. REIT
(5):+16.21%
______
(1) Dow Jones Industrial Average. (2) Standard & Poor's 500 Stock Index. (3) NASD Composite Index. (4) Small Capitalization segment of U.S. equity universe. (5) Morgan Stanley REIT Index.
U.S. Treasury Yields |
|
1/6/10 |
4/9/10 |
9/10/10 |
3-Month |
.016% |
0.15% |
0.13% |
6-Month |
0.25% |
0.23% |
.018% |
2 Year |
0.99% |
1.06% |
0.56% |
5 Year |
2.60% |
2.62% |
1.58% |
10 Year |
3.85% |
3.88% |
2.79% |
Source: Bloomberg LLP. |